Include Unrelated Household Members When Calculating Household Income

When you calculate a household’s income to determine if it’s qualified, total the income of all the household’s members, even if they’re not related. If you make the mistake of counting members’ incomes separately, you’re likely to determine that their household is qualified when it may not be.

For example, say your minimum set-aside is 40-60. This means a household’s total income mustn’t exceed 60 percent of the area median gross income (AMGI) for it to be qualified. Now suppose the total of all household members’ incomes exceeds 60 percent of AMGI for that household size, but none of the household’s members earns more than 60 percent of the AMGI for a one-person household. Managers who count the members’ incomes separately will incorrectly determine that the household is qualified.